Virtually every aspect of business can be outsourced nowadays, and fulfillment is no exception. As a time-, energy-, and resource-intensive task, many ecommerce business owners find themselves deciding to outsource fulfillment to someone with the tools and expertise to do it right.
A qualified third-party logistics (3PL) partner can enhance any ecommerce business’ fulfillment strategy by providing services that handle everything on their behalf. Inventory and order management, order processing, warehousing and storage solutions, shipping and delivery service options are all outsourceable.
If you’ve been mulling the decision to outsource fulfillment but haven’t pulled the trigger just yet, keep reading. This article will walk you through the five core benefits of 3PL partnership and reveal why it’s a viable solution for any business owner seeking to meet the demands of a growing customer base.
Benefit #1 – Opportunity for Growth
Ecommerce fulfillment isn’t just about packing boxes – it’s an intricate process requiring your full time and attention, from the second an order comes in to its delivery at your customer’s doorstep. With a growing customer base, you’ve likely got plenty of other things to do besides managing inventory levels and order shipments. While it’s certainly important, spending all of your time managing your growing order volume means less time spent on other priorities. Why should business growth activities take a back seat now?
Accurately tracking inventory is also an important yet time-consuming job for which most major retailers hire a logistics manager or supply chain manager. That’s often not an option for budding ecommerce businesses, and even when it is, we all know that managing in-house staff is another job in and of itself.
When you choose to outsource fulfillment to a third-party service provider, you effectively transfer all the responsibilities and challenges of logistics over to them. Fulfillment companies are equipped to navigate these complex operations and can help you get orders to customers in a faster and more cost-effective manner. You’ll be able to go back to focusing on growing your business while knowing your orders and customers are taken care of.
You’ll not only gain access to more efficient practices and tools but also benefit from the knowledge of a specialized team with expertise in all the right areas. In short, outsourced fulfillment centers and the services they offer make it possible to scale with fewer limitations.
Benefit #2 – Cost-Savings
It’s almost always harder to break even when managing inventory yourself, even with a comprehensive in-house fulfillment strategy. There’s shipping costs, the cost of keeping inventory in stock, and the need for a warehouse to store everything in – not to mention the expenses associated with having to package and track each order. The numbers can start to add up when you’re dealing with a high volume of orders or multiple fulfillment locations.
This is where one of the most tangible benefits of 3PL providers comes into play. Outsourcing to an experienced fulfillment provider allows companies to save on overhead expenses while mitigating the risks that come with rapid expansion. Fulfillment companies typically work with their clients on a contracted basis, where costs are predetermined and tied back to however many orders are shipped in a given month. This can make month-to-month costs much more predictable compared to an in-house strategy.
Benefit #3 – Advanced Technology
The fulfillment process has plenty of room for error. Incorrect inventory inputs and missed steps are all too common. Efficiency isn’t just a matter of how thoughtful your execution is, but also the tools you take advantage of. Features like real-time insights and analytics can make a big impact when it comes to tracking and managing inventory on an organizational level.
Choosing to outsource fulfillment to well-established experts means reaping the benefits of 3PL providers’ pre established digital infrastructure. Order Management Systems (OMS) and Inventory Management Systems (IMS) are just two of the powerful tools that 3PLs use to help your ecommerce business effectively manage orders, product stock, and more. These robust platforms are designed to capture data in real-time, allowing for precise inventory tracking and real-time visibility into customer orders. The right technology will be able to help mitigate a variety of common pitfalls as well, from deadstock to spoilage. Look for a company that has its own software, as this will provide you with the most control over how the process is managed.
Although just one perk of choosing to outsource fulfillment, many businesses find that the benefits offered by fulfillment companies’ inventory management solutions are enough of a reason to make the switch. You don’t have to front the cost of developing things in-house, and a 3PL that has developed its own tech solution will have the ability to tailor to your business’ individual needs.
Benefit #4 – Operational Agility
Partnering with an ecommerce fulfillment services company can give you the ability to quickly adjust your operations depending on current market conditions. That level of nimbleness can be a defining factor of survival during the growth stage. It’s particularly valuable for those that operate within seasonally-affected markets like the retail industry, where customer demands can fluctuate heavily from month to month.
Even if you don’t have a defined ‘busy season’, deciding to outsource fulfillment operations gives you peace of mind. Run Black Friday sales, Cyber Monday promotions, and create irresistible product bundles with the confidence that comes with knowing everything will be taken care of.
This is one of the most noteworthy benefits of 3PL outsourcing for ecommerce businesses that anticipate growth in the near future, or that don’t want to limit themselves to short-term solutions. A good fulfillment provider will be able to adjust and pivot services should you decide to pursue new product lines and inventory strategies. For example, a well-equipped 3PL will be able to accommodate changes in packaging requirements and shipping methods, or even facilitate temperature controlled storage if and when needed.
That’s a major competitive advantage in fast-paced markets. The ability to leverage economies of scale and access a larger pool of resources than would otherwise be available to you as a single business is invaluable. Whether you need to send out thousands of packages or a few hundred, your fulfillment partner should have the infrastructure and capabilities in place to handle it all with ease.
Benefit #5 – Enhanced Performance and Customer Satisfaction
You may have customers’ happiness at heart, but you won’t always have the time to personally guarantee it. Order management can get out of hand quickly and often does so in a way that affects buyer satisfaction rates; proactivity is key.
Customers are more likely to remain loyal when they receive their orders quickly, accurately, and with the best possible experience from start to finish. A qualified 3PL partner can ensure that happens on a consistent basis with less volatility. Being on top of the ball in this way allows you to go beyond simply getting the job done and adopt additional tactics to deliver even better service. Tracking, for instance, isn’t necessarily a requirement for fulfillment strategy but can be a key customer experience edge against competitors.
The performance benefits of a 3PL partnership don’t stop there either. Their warehouse space and shipping expertise is often far superior to what a typical business can deliver. This means they can automate certain parts of the logistics process, reduce human error risks, cut cycle times, and drive better results for your customer service in the long term.
The Right Fulfillment Strategy Solutions are Closer Than You Think
No one ever said managing inventory is easy. But there are ways to make it easier on yourself. The decision to outsource order fulfillment to a 3PL provider can transform your processes to become more efficient, cost-effective, and agile.
Shipfusion’s robust infrastructure of warehouses and cutting-edge technology is perfect for companies that are ready to take their operations to the next level. Partnering with us means getting all the classic benefits of 3PL service and then some. Learn more about what Shipfusion can do to streamline your ecommerce business operations by booking a call with one of our fulfillment experts today.